High-spending Chinese tourists give hope to retailers

CBA’s Ian Saines, Paul Zahra of David Jones and UnionPay chairman Su Ning at the launch of new card agreement
Sasha Woolley

by
George Liondis

They have been hit by the high dollar, undercut by online rivals and sideswiped by weak consumer confidence, but Australia’s retailers have been given new hope in the form of big-spending Chinese tourists.

Su Ning
, the chairman of Chinese credit card giant
UnionPay
, was in Sydney on Wednesday to celebrate the acceptance of the group’s cards at David Jones stores for the first time and said Australia could count on a growing number of Chinese visitors with deeper pockets.

“Definitely, there will be more and more Chinese people visiting Australia, not only for travelling, but also for business trips and for more in-depth studies here," Mr Su told The Australian Financial Review through an interpreter. “Apart from sightseeing, Chinese travellers will spend and purchase here in Australia. We have a cultural tradition in China and there is a short phrase to sum it up. It is that you can be frugal when you are at home, but when you travel you need to be generous and good to yourself."

Some 700,000 Chinese tourists, business travellers and students visit Australia every year, and are estimated to be worth more than $10 billion to the domestic economy.

UnionPay, which is owned by China’s four biggest banks, has more than 3.4 billion cards on issue, which equates to 75 per cent of all the world’s credit cards and more than Visa and MasterCard put together. The average transaction on a UnionPay card in Australia is higher than on other international cards.

David Jones
chief executive
Paul Zahra
, who this week announced that quarterly sales fell to their lowest level for at least six years, said the ability to tap into the lucrative Chinese market was a major opportunity and gave it a strategic advantage over rival retailers.

“UnionPay opens our doors to more than 700,000 Chinese visitors and students in Australia every year," he said.

The allure of Chinese tourists has also captured the attention of Australia’s banks. In a first for the group,
Commonwealth Bank of Australia
began accepting UnionPay cards at its David Jones terminals yesterday and plans to roll out the service to its other merchant customers by July.
National Australia Bank
already accepts some UnionPay cards, while ANZ has also signed an agreement with the group.

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“This will certainly improve the ability of Chinese travellers to spend a bit more when they come to the country," CBA group executive of institutional banking and market Ian Saines said.

“The UnionPay transactions are on average twice the size of transactions on other global cards. But for Commonwealth Bank it is a further addition to our ability to meet the needs of our merchant customers. Having that UnionPay sticker on their window will bring in more Chinese people."

Mr Su, who is only permitted to travel outside of China three times a year, said the country’s travellers were drawn to Australia because of its natural beauty. But he said shopping was also high on the list and that global brands were a top priority.

“For foreign brands and product, their pricing in China domestically is much higher than their regular pricing in other countries," Mr Su said.

With Australia’s economy linked closely to China, Mr Su said the country was still on a growth trajectory though the pace had slowed.

“We have a consumer confidence index based on transaction data on the UnionPay network. Of course our index reflects the outlook for China’s economy," Mr Su said. “Although in recent years the predictions and forecasts for China’s economy may be not as remarkable and high growth as previous years, judging from our consumer confidence index, we can see there is still double-digit growth. So, we are expecting maybe not the remarkable kind of growth of previous years, but the overall tendency is still going up for the Chinese economy."